Two months have passed since Venezuela's legislative elections on September 26, which gave a marginal victory to the forces of the revolution in the total vote and a 98-67 majority in terms of seats in the new National Assembly which will be installed in January. What lessons are being learnt from that experience?

As we reported, the Venezuelan opposition managed to win terrain in the percentage of the overall votes. This was due to the loss of one million chavista voters who abstained. It was a clear warning to the revolution, which reflected the impossibility of keeping the revolution at a half-way point.

The polarization between the classes is more profound than ever before and the contradictions building up in society are beginning to find new expressions. The debates inside the PSUV, the talk of radicalization, the new expropriations, the demonstrations of workers and peasants and so on, all this proves that the Venezuelan revolution finds itself at a crossroad.

Economy remains in a bad shape

Venezuela's GDP fell by 2.4% between January and September this year. The Venezuelan Central Bank has presented this as a good figure, because the fall is less than the previous year! But for the workers and poor, the situation looks very bleak indeed. The fact is that Venezuela's´ economy has been in recession for the last 18 months.

The latest figures show that construction fell by -7,9% in the third quarter, mining by -10,6%, trade by -4,4% and electricity and water production by -7,8%. Manufacturing had a minimal growth of 0.1%i. This is a long way from the 7 to 10 per cent growth that the Venezuelan economy experienced between 2004 and 2007.

The recession, combined with a sky-rocketing inflation, has already had a big impact on consumption, which is expected to fall by 10% during the Christmas holidays. Prices of foodstuffs have risen by 30% in 6 of the main cities. The inflation rate for 2010 currently stands at 23%, according to Venezuela's Central Bankii.

While the devaluation of the Bolívar back in January was supposed to help raise exports, the reality is that non-oil exports during the first nine months of 2010 fell by -1,2% compared to the same period of the previous year. If you compare it to the same period of 2005 (when the economy was at its highest), the contraction is -56%. This clearly shows that the policy of devaluation and giving loans and credits to the private companies, which was applied in January, is not working.

Now the business executives are demanding more dollars from the government. Carlos Larrazábal, president of Conindustria (the industrial employers' federation) recently demanded that the government “invest in private initiative and respect the socioeconomic model contemplated in the Constitution and put a halt to the policy of expropriations which are being used to punish private employers'”iii.

What Mr. Larrazábal conveniently ignores is, that it is the group he is representing, i.e. the Venezuelan industrial capitalists, who are not investing in the economy. In effect they are carrying out a strike of capital, accentuating the effects of the crisis. The measures adopted in January have not helped. In fact, the latest expropriations are exactly the product of this situation; the government is only nationalizing the firms that are at a standstill, in order to protect the workers and prevent massive lay-offs.

From the state's point of view, the situation is also very bad. The national oil company PDVSA, which is creating most of the country's wealth, is facing a difficult situation. Although the price of oil per barrel has stabilized on world markets, the company will have to make huge investments in repairs and renovations of its refineries in Puerto la Cruz in the next few years. Furthermore, a recent article in El Universal revealed that PDVSA still has to pay huge amounts of its 2009 debts to sub-contracting companies and suppliers.

Struggle around the parliament

Immediately after the September 26 elections, attention was centred on parliament. The right wing launched a media offensive, claiming that it would be “immoral” and “disrespectful” if the government were to use the last three months of the old parliament (where it has the required two-thirds majority) to pass organic laws. Representatives of Conindustria and Fedecamaras spoke in terms of “reconciliation”, “dialogue”, “negotiations” and “pluralism”.

On the other hand, both the workers' movement and the rank-and-file of the Bolivarian movement demanded that the government should do just that: use its present dominant position in parliament, before the right wing are able to block organic laws from January onwards. Some people even demanded that the present parliament pass an Enabling Act for Chávez to decree revolutionary laws, regardless of the new composition of the 2011-17 Parliament.

No doubt some so-called lefts will cry about the “respect for democracy”, “authoritarian rule”, and so on, just as they did in 2007 when the last Enabling Law was passed. But such people are completely incapable of understanding that democracy cannot be taken out of its class context. An Enabling Act would be an extremely progressive measure in the present situation, as it would dispel every legal excuse of the reformists, for not carrying out the Socialist Revolution to the end. It is precisely for this reason that it is the workers and poor who are raising this demand.

Pressure from below

The main reason why this struggle is taking place is because it reflects the growing pressure from the different classes. Workers, peasants and urban poor are demanding a radicalization of the revolution, while the right wing is talking hollowly of “moderation”, “national reconciliation” and so on.

The pressure from below for radical change was seen clearly in the recent National Workers' March organized by the UNT on November 9th. This demonstration was called to demand the passing of a new Labour Law, which would include the formal legitimisation of workers' and factory councils. The UNT is demanding that this law be passed before the new parliament comes into office in January, so as to use the present two-thirds majority which enables the government to pass organic laws. It is a real scandal that the law has not been passed within the parliamentary legislature which is about the end.

The demonstration was a big success, gathering nearly 10,000 workers from across the country. This was a mobilization which took place completely outside the official government structures and without state resources, such as buses and media propaganda. Workers from many factories sent delegations to represent the whole plant, marching with their own banners and additional demands (See a photo gallery).

The same phenomenon of independent class action was seen on November 25, when around 7,000 revolutionary peasants took to the streets of Caracas with the main slogan: “The people are rising together with Chávez, for the democratic radicalization of the revolution”. The banners at the demonstration carried very militant slogans: “Corruption is sabotaging the revolution”, “Against bureaucracy, corruption and imperialism” and “Bureaucratism is killing the revolution”, “Bureaucratism sabotages socialism” (See photo gallery).

The peasant protesters, mobilized by the Frente National Campesino Ezequiel Zamora (“Ezequiel Zamora” National Peasant Front), demanded that the Agrarian Reform be accelerated, in order to destroy the rule of the big landowners in the countryside. They emphasized that this would be a practical way of radicalizing the revolution, such as Chávez has recently proposed.

Last but not least, we have seen the demonstration of the workers in the basic industries of Guayana, where hundreds of workers demanded an end to the sabotage of managers and reformist trade unionists, who are doing everything in their power to stop the implementation of Workers' Control in ALCASA, SIDOR and other factories. (See a report with photo gallery).

Debate inside the PSUV and the “Radical tendency”

This pressure is also being reflected within the United Socialist Party, the PSUV. Already before the elections, there was growing discontent with what many rank-and-file activists perceive as bureaucratic leaders, mayors and governors. There was also widespread anger provoked by the Primary Elections to select Deputy Candidates, which took place in May and which were marked by irregularities, advantages for certain candidates and even claims of fraud in some districts (See:Venezuela: Sharpening contradictions between left and right of the PSUV ).

However, this mood reached a new and qualitatively higher level after the September 26 elections result. Most activists did not believe in the triumphalist speeches of certain party leaders and correctly linked the electoral setback in the overall vote to the lack of decisive measures to advance the revolution. There was also a sense of genuine concern among many grassroots activists who fear that the revolution is seriously in danger and can be thrown back, if the path is not corrected.

It was in this context, that Eduardo Samán (former minister of trade) opened a debate on the balance-sheet and the lessons which need to be drawn from the election results. In an interview given toLucha de Clases (the Venezuelan section of the IMT) Venezuela: Interview with ex-Minister of Trade Eduardo Samán, he stressed the need for a profound change within the PSUV and the setting up of a “Radical Tendency” (“Corriente Radical”) to achieve this.

This opened up a huge discussion in the party ranks. In every corner of the country this idea is being discussed. Tens of thousands read the interviews with Samán and he subsequently decided to tour the country to speak about his proposal. Big meetings have already been held in Barquisimeto, Valencia, Maracay, Caracas and Táchira.

In the latter state, he held a press conference together with Iris Varela, a PSUV Member of Parliament who was recently re-elected, to explain his proposal of a Radical Tendency. This was reflected in many of the big media, such as Últimas Noticias, the biggest daily paper in Venezuela. In some places, such as Lara and Mérida, whole groups of PSUV members, such as the Palavecino Revolutionary Current, have already come out publicly in favour of such a Radical Tendency. In some poor Caracas neighbourhoods, such as Catia and 23 de Enero, the idea is being discussed in the PSUV branches.

While this development clearly shows that there is a huge contradiction between the top and the ranks of the PSUV, it is also necessary to point out that the idea of a new Radical Tendency is attracting varied and even heterogeneous layers. Most of the supporters of the idea are attracted by Samán's clear statements on the need to accelerate the process, take action against the capitalists and push for what he calls “Socialist definitions” (see interview: Former Trade Minister Samán: Let's build the Radical Socialist Current of the PSUV ).

But there are also others, who want to use the new Radical Tendency as a platform for abstract academic discussions and the promotion of left reformist politics. One such individual is Victor Álvarez, ex-minister of Basic Industries and Mining, who has proclaimed his support for the Radical Tendency, but at the same time he is advocating a mixed-economy and a greater “popular” participation in economic life (i.e. the idea of the development of a huge petit-bourgeoisie as a way to combat monopolisation).

The same arguments have been repeated by Javier Biardeu, a prominent sociologist and PSUV member. Like Álvarez he is also a close collaborator of the Centro Internacional Miranda. In a recent interview to the daily paper Últimas Noticias he proclaims himself in favour of the Radical Tendency, although the rest of the interview is filled with moderate and even outright reformist ideas, speaking against “Leninism” and what he calls “the old Socialism [of the 20th century]”, which apparently puts too much emphasis on nationalizations and planned economy, for his taste!

Let us ask these comrades a straightforward question: What is “radical” (and new) about a mixed economy? This is not at all a new idea, but a very old idea going back to the utopian Socialists, who, like Biardeu and Álvarez, thought that one can convince the capitalists (and landlords) little by little of the wonders of Socialism by launching units of “social production” (whatever that might mean) which will show by example. History has proven decisively that this is not only a utopian, but also a dangerous policy. In Nicaragua, the idea of a maintaining a “mixed economy” was a key factor in the defeat of the Sandinista Revolution in the 1980's.

The coming months will see how the Radical Tendency develops. The Marxists will fight against the confused and utopian idea of a “mixed economy” and for a programme of action against the capitalists, landlords and bankers. In our opinion, there cannot be a third way between Capitalism and Socialism, and the Radical Tendency must be born on a coherent, clear ideological foundation, not on any mixed compromise.

Chávez and the radicalization of the revolution

The debate on the Radical Tendency has also reached Chávez who in effect has adopted a “wait-and-see” position. On the one hand he recently stressed that tendencies are welcome in the party, as long as they are not divisive. On the other hand he has repeated calls for the radicalization of the revolution and rejected any possibility of a pact with the bourgeoisie.

He has also adopted some measures along these lines. New nationalizations have taken place, with the expropriation of Agroisleña, an agricultural supplies company, property of the multinational Vestey group, that serves 70% of Venezuela’s producers. Other recent nationalizations have included Sidetur, a major producer of steel used in the construction of houses, bridges and other infrastructure and public works. This is a factory, located on the outskirts of Ciudad Guayana, a major industrial stronghold in Eastern Venezuela, of more than 300 workers who had been in a long trade union struggle with the multinational owner. To this must be added the expropriations of U.S.-based glassmaker Owens-Illinois affiliates, placing 60% of Venezuela’s glass bottle industry under government ownership.

In his own way, Chávez is trying to radicalize the revolution. It appears as though he understands the impossibility of prolonging the present situation. The September 26 elections were a painful warning which obliged him and every activist of the Venezuelan revolution to rethink everything. While the new nationalizations are big steps forward which should be supported energetically, they still do not fundamentally change the basic correlation of forces in the economy. The contradiction was described very accurately in Alan Woods’ recent article dealing with the question of private property:

“The state can only plan that part of the economy that has been nationalized. Since many of the firms that were taken over were bankrupt, unprofitable and badly run in the first place, they require a lot of investment to make them viable. This imposes a severe burden on the state and the public finances, while the most profitable sectors remain in private hands. It is a case of nationalizing the losses and privatizing the profits. This will ultimately be unviable.

“Failure to nationalize the commanding heights of the economy creates contradictions at all levels, which will inevitably end in a chaotic situation. It will combine all the worst evils of capitalist anarchy (falling investment, flight of capital, factory closures, inflation and unemployment) with all the most negative features of bureaucracy (waste, mismanagement, inefficiency and corruption). For a time the vast oil wealth of Venezuela can tolerate this situation, but not indefinitely.” (Venezuela: The lies of the counter-revolution answered )

The new nationalizations have of course been met with a cold and contemptuous attitude on the part of the ruling class, who has started a hysterical campaign in the private media in defence of “private property”. Part of this anti-communist campaign has included references to “foreign extremist adviser” Alan Woods (a leading comrade of the International Marxist Tendency), who has been characterized as the “main ideologist” of Hugo Chávez in several major right-wing media (Globovisión, El Universal, El Nacional, El Mundo and Tal Cual, just to name a few).

The bourgeoisie understands that its position is very much unstable and insecure. The situation is getting out of control and it is clear that this campaign is a way of striking at what they perceive as the most militant and radical wing of the Bolivarian movement. In close collaboration with the reformists of the movement, they are trying to put maximum pressure on Chávez to distance himself from the militant wing in his movement and adopt a more moderate outlook. But so far, they haven't succeeded and Chávez is speaking of radicalization, not moderation.

The 2012 Presidential Elections are already within sight. The opposition is lining up its forces and its strategy still seems to be that of a slow, painstaking advance by taking advantage of the government's mistakes and the daily problems of everyday life in Venezuela: Inflation, the crime-rate, lack of housing and now also the recent heavy rainfall which has cost hundreds of families their homes.

On the other hand, the discussions inside the PSUV are also continuing and getting sharper. Chávez has now called a national gathering of the party for December 11 and 12, in order to “draw up a critical and constructive balance sheet of the elections” and make a plan for the next two years. This event could become a new focal point for the struggle between revolution and reformism within the Venezuelan revolution.